April 1st, 2011
Econintersect: Nasdaq OMX and Atlanta based ICE (InterContinental Exchange) are attempting to outbid Deutsche Boerse for NYSE Euronext. Nasdaq-ICE’s joint bid of $42.50 in cash and stock for the NYSE was not a complete surprise, as reports surfaced last month (reported by GEI News) that Nasdaq OMX, parent of the Nasdaq Stock Market, would make a competing offer.
Nasdaq OMX said its bid represents a 19 percent premium over the price proposed by Deutsche Boerse, based on Deutsche Boerse's closing share price as of March 31, 2011, and a 27 percent premium over NYSE Euronext's stock price on February 8, 2011, the day before NYSE Euronext said it was in discussions with Deutsche Boerse.
Under the terms of the joint Nasdaq-ICE proposal, the Atlanta-based ICE would acquire NYSE Euronext’s derivatives businesses while Nasdaq would keep NYSE Euronext’s remaining businesses, including the NYSE Euronext stock exchanges in New York, Paris, Brussels, Amsterdam and Lisbon, as well as the U.S. options business.
Nasdaq OMX and ICE said they will finance the cash portion of the acquisition through cash on hand and a $3.8 billion financing commitment.
The battle over NYSE Euronext comes amidst plenty of takeover activity in the exchange market. In the far east there has been an offer by the Singapore exchange to acquire the Australian Stock Exchange, as well as rumors of possible merger activities involving other markets, including Hong Kong, as reported by GEI News. In February, the London Stock Exchange and TMX Group, parent of the Toronto Stock Exchange, announced a $2.9 billion merger. On March 7 GEI News reported on a rumor that Nasdaq OMX itself might be the target of a take-over by the merged London-Toronto Exchange after that merger is completed later this year.
In a statement, Robert Greifeld, chief executive of Nasdaq OMX, said that if the Nasdaq-ICE offer were completed it would “would increase transparency and liquidity in U.S. markets and create jobs as new companies raise capital.”